The process of dissolving and terminating a Virginia corporation or a Virginia limited liability company (each generically referred to in this article as an “entity”) was discussed in the January edition of this newsletter. As stated in that article, when a business owner desires to close an entity, he or she can elect to formally dissolve and terminate the entity, or simply fail to pay the annual fee owed to the State Corporation Commission (SCC) (in which event the SCC will automatically terminate the...

In today’s weakened and uncertain economic climate, the sad truth is that many employers are being forced to release members of their work staff, and many employees are facing the loss of their jobs. It is the practice of many employers to present recently dismissed employees with severance packages, conditioning the receipt of any severance benefits on the execution of a severance agreement and release. These agreements require careful legal analysis on both ends – from the perspective of the former employee, and from the perspective...

A common problem that we encounter at Gross & Romanick is the client who wishes to enforce an agreement that was not put into a writing signed by all parties. Even an exchange of e-mails or written proposals without a signature does not necessarily create a binding contract. While some oral agreements are enforceable, it can be extremely difficult to prove the existence of an oral contract and its terms. To be enforceable, an oral contract requires:
(a) a meeting of the minds,
(b) definite terms,...

Merchants, landlords and anyone who extends credit via note, contract or lease should follow the lead taken by banks when making credit decisions. Make sure your applicant fills out a credit application. The credit application is a fact sheet about the debtor; often, it also includes credit terms. Part of the credit application should be a request for specific documents, such as tax returns, deeds and automobile titles. There are important reasons why you should obtain detailed information before you extend credit.
First, if there is a default, background information and a listing of assets will be invaluable during the collection...

For business owners, a common aspect of doing business is a request by a lender, the landlord or vendors for the owners to personally guarantee the debts and obligations of the company. From the creditor’s perspective, it provides additional assurance that the debt will be paid. From the business owner’s perspective, it may be necessary to close a deal or to obtain financing. However, not all business owners understand the legal significance of the personal guaranty. In many cases, owners are so eager to obtain financing, and so confident that their businesses will succeed, that they ignore the potential repercussions...

Perhaps the most common question we receive from individuals looking to start a new business is: “What is the difference between a corporation and an LLC?” This is a very important question because understanding the differences between these two entities is essential to making the right choice for your new business. Or, in some cases, making a decision regarding whether to convert your existing company to a corporation or an LLC.
The first chart below addresses some of the important differences between Corporations and LLCs. The second...

Purchasing an existing business is a complicated process with several stages. The most important stage for the buyer is the “due diligence” study. A thorough due diligence study should reveal areas of concern and possible mismanagement by the seller. The study will assist the buyer to make an educated determination whether to proceed with the purchase. Regardless of the structure of the purchase transaction (asset sale or equity sale), it is imperative that the buyer conducts a comprehensive review of the business, both from a financial and legal perspective. Hiring an experienced attorney is critical for the legal review, and...

There are two principal methods for buying or selling an existing business: a stock purchase and an asset purchase.
The advantages and disadvantages of each method should be assessed in every business sale. The purpose of this article is to explain in very general terms how these methods (and the resulting implications) differ. You may also want to view our YouTube video on asset purchases at: http://www.youtube.com/watch?v=UtM8GXiOSwE
In the stock purchase, the buyer purchases the existing ownership interests of the business. If the business is a corporation, the buyer is purchasing stock. If the business is a limited liability company, the...

One important issue that individuals organizing a new business entity must consider is what will happen in the event one of the owners wants to voluntarily withdraw from ownership in the entity. By “withdraw”, we mean that the owner wishes to return the ownership interest (stock for a corporation or membership interest for a limited liability company) to the company or to the other owners in exchange for some form of compensation. This issue is commonly overlooked in the organizing process, perhaps because the ambitious and optimistic organizer is not mindful of the fact that one day he/she may want...

The Americans with Disabilities Act (the “ADA”) was enacted into law by Congress in 1990. Title I of the ADA prevents employers from discriminating against a person with a disability, on the basis of that disability, with respect to job application procedures, hiring, advancement, discharge, compensation and other terms or conditions of employment. In 2008, after a series of U.S. Supreme Court decisions narrowed the definition of a “disability” so as to significantly limit the scope of the ADA, Congress passed the ADA Amendments Act....

A firm with great experience, Gross & Romanick is cited in Martindale-Hubbell® as having “an exemplary reputation and well established practice” with “high professional standing.” The firm received Martindale-Hubbell’s® highest ethical rating.

This website may contain cumulative and specific case results of matters handled by the lawyers from Gross & Romanick, P.C. Case results depend upon a variety of factors unique to each case. Case results do not guarantee or predict a similar result in any future case undertaken by the law firm.